Successfully negotiating claims since 1867
Major building claims on homeowners’ policies recognise that the policyholder needs expert help in assessing and scoping the works needed, knowing which contractors can do them to the right standard, at the right price and on time, and ensuring that everything happens as it should. That service is paid for under the professional fees cover in the policy. Fees payable to surveyors and engineers chosen by the homeowner and under contract to them are payable by insurers.
It’s a cover that provides reassurance for both insurer and policyholder. It gives the homeowner some control over what’s happening to their house, and provides the responses needed when the unexpected happens. Large claims are adjusted by agreement between the insurer’s adjuster and the policyholder’s professionals, with the homeowner’s interests being protected. It’s a process we value when we’re dealing with big numbers following fire, flood, storm, impact and all the other misfortunes that can beset a home.
With one exception. Subsidence. In the last few years insurers have increasingly been instructing their own contractors. Some insurers own or part own those suppliers. Typically, the contractor will inspect, report, recommend and do the work. The process contains no protection for the homeowner, and it’s not hard to suspect that minimising the financial exposure is central to the contractor’s and the insurer’s thinking.
Moreover, despite most modern policy wordings including phrases such as ‘We may appoint contractors’ the general approach most insurers seem to take at present is that the involvement of their contractors/suppliers is mandatory and, further, that no consideration will be given to the insured appointing their preferred contractors/suppliers, notwithstanding the fact that the policy may contain a professional fees clause.
At Thompson and Bryan we have seen cases with problems such as inadequate investigation, inadequate scoping and incompetent repair with later structural failure. The insurer has to make all this good, obviously, because in exercising its option to repair it changes the legal nature of its contract. It’s no longer a contract of indemnity, but one of service, subject to all the consumer protection that attaches.
Invariably, we see that if the homeowner had had their own surveyor, structural engineer, geotechnical specialists, subsequent problems would have been unlikely. But insurers have generally, when they have appointed their own contractor, declined to pay for the skills covered by the policy.
We think that unfair and unreasonable and are taking some cases through formal dispute resolution processes. If you have a client with a major subsidence problem, we’ll be happy to talk to you about it.